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We think that it’s fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Not every pick can be a winner, but when you pick the right stock, you can win big. For example, the CareDx, Inc (NASDAQ:CDNA) share price is up a whopping 673% in the last three years, a handsome return for long term holders. Also pleasing for shareholders was the 35% gain in the last three months.
Anyone who held for that rewarding ride would probably be keen to talk about it.
CareDx isn’t a profitable company, so it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over the last three years CareDx has grown its revenue at 33% annually. That’s much better than most loss-making companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 98% per year, over the same period. It’s always tempting to take profits after a share price gain like that, but high-growth companies like CareDx can sometimes sustain strong growth for many years. In fact, it might be time to put it on your watchlist, if you’re not already familiar with the stock.
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
It’s good to see that CareDx has rewarded shareholders with a total shareholder return of 214% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 31% per year), it would seem that the stock’s performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.